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When shopping for a new car, you’ll come across advertisements with extremely low interest rates – sometimes even 0% car financing deals. But you may be wondering if those offers are too good to be true? Before signing on the dotted line and driving off the lot, read this guide to learn the ins and outs of 0% financing. Plus, find out who is offering 0% financing in Canada in August 2023 among some of the most popular car brands.
In Canada, dealerships and loan brokers can help you with 0% financing promotional deals. But 0% financing deals are hard to come by in the current environment because of the ongoing shortage of new cars and the series of rate hikes by the Bank of Canada. To find the lowest rates available on the market, whether that’s 0% financing or slightly higher, an option is to apply to a loan broker like Loans Canada, who’s partnered with many dealerships to find the best offer for you.
Check out the table below to see who is offering 0% financing on cars in Canada in September 2023, or some of the lowest rate financing deals available, from popular car brands.
Brand | Starting low rate finance deal (APR) | Vehicle & loan term |
---|---|---|
Chevrolet | 0.99% | 2023 Silverado 1500, offer excludes ZR2 and High Country Trims (up to 60 months) |
GMC | 0.99% | 2023 Sierra 1500, offer excludes AT4X, Denali and Denali Ultimate Trims (up to 60 months) |
Ford | 1.99% | 2023 Escape (up to 60 months) |
Ford | 2.99% | 2024 Edge (up to 72 months) |
Ford | 2.99% | 2023 Mustang (up to 72 months) |
Mitsubishi | 2.99% | 2024 and 2023 Eclipse Cross (loan terms not disclosed) |
Mitsubishi | 2.99% | 2023 Mirage (loan terms not disclosed) |
Audi | 3.48% | 2023 A4 (60 months) |
Subaru | 3.49% | 2023 Forester (24 months) |
Cadillac | 3.49% | 2023 CT4 (up to 36 months) |
Cadillac | 3.49% | 2023 CT5 (up to 36 months) |
Audi | 3.98% | 2023 A5 Coupé (60 months) |
Audi | 3.98% | 2023 Q7 (60 months) |
Volvo | 3.99% | 2023 XC90 (60 months) |
Volvo | 3.99% | 2023 XC40 (60 months) |
Ford | 3.99% | 2023 Bronco Sport (up to 72 months) |
Ford | 3.99% | 2023 Explorer XLT (up to 72 months) |
Subaru | 3.99% | 2023 Solterra (24 months) |
Subaru | 3.99% | 2023 Ascent (24 months) |
Subaru | 4.49% | 2024 Outback (24 months) |
Subaru | 4.49% | 2024 Impreza (24 months) |
Subaru | 4.49% | 2024 Crosstrek (24 months) |
Subaru | 4.49% | 2023 WRX (24 months) |
Buick | 4.99% | 2023 Envision (up to 48 months) |
Buick | 4.99% | 2023 Encore GX (up to 48 months) |
Buick | 4.99% | 2023 Enclave (up to 48 months) |
Chevrolet | 4.99% | 2023 Equinox (up to 48 months) |
Chevrolet | 4.99% | 2023 Blazer (up to 48 months) |
Offers last verified on Sept. 1, 2023 and expire at the end of the month. Offers are on approved credit, vary by region and may have other conditions.
The types of financing offers advertised by dealerships will depend on where you live. So the low or 0% financing car deals at Ontario dealerships could be different to the deals offered at dealerships in Alberta or BC. Plus, the deals you qualify for will depend on factors like your credit score, income and if you include a down payment.
So when you’re ready to shop for your new car, check with your local dealerships to find out what financing offers are available at the time.
Currently, there are no car companies in Canada offering 0% financing. The lowest available is 0.99% from Chevrolet and GMC. This is based on our research of September 2023 offers from 22 car brands in Canada.
The car brands that are currently offering the lowest financing offers are Chevrolet (0.99% for the 2023 Silverado 1500, offer excludes ZR2 and High Country Trims) and GMC (0.99% for the 2023 Sierra 1500, offer excludes AT4X, Denali and Denali Ultimate Trims).
In the recent Finder: Consumer Sentiment Survey Q2, 15% of respondents plan to take out a car loan in the next three months.
More than a third of Canadians (35%) who plan to buy a vehicle in the next three months, expect to make the purchase at a new car dealership.
A 0% financing offer allows you to borrow money to buy a vehicle without having to pay interest and financing fees, which combined is known as the annual percentage rate (APR). This type of financing is mostly offered by dealerships as a way to sell more cars. It is usually reserved for customers who have excellent credit (usually above 700).
Banks or other lending institutions do not typically offer 0% financing on cars in Canada because these institutions have nothing to gain by offering them to you. On the other hand, a dealership will be more willing to offer 0% car financing deals because at least you’re driving one of its cars off of the lot and moving inventory.
At first glance, 0% financing on a car is exactly as it appears: You purchase a new car at the agreed-on price, and then make monthly payments on the principal of the car with no interest for a set number of months. However, keep these points in mind:
To get a 0% car financing in Canada, you’ll need to do your homework to make sure you get the best deal. Follow these steps to get started:
There are a few red flags you’ll want to keep an eye out for when shopping around for a 0% financing in Canada:
There are a number of alternatives to 0% financing that you might want to consider when shopping for your next vehicle:
If you can’t qualify for 0% financing in Canada, you can still lock in a low interest rate for your specific financial situation. Compare car financing options below to see what lenders and rates you may be able to qualify for.
There are a number of things you can do to get a better offer on your next vehicle even if you don’t qualify for 0% financing deals. These include the following:
Car dealers with 0% financing aren’t able to offer this to people with bad credit. This is because they will have to take a big financial risk by offering you a 0% car loan.
What your bad credit tells your dealer is that you have a history of missing loan payments or defaulting on your financial obligations. The best way to get around this is to improve your credit score so that lenders see you as a reliable customer. Until then, you may end up paying higher interest rates to make up for the risk lenders have to take in giving you money.
Getting 0% car financing deals can save you money on interest rates and let you pay your car loan off faster. The main downside of these loans is that they come with strict eligibility requirements and are usually only offered by car dealerships. But even if you can’t qualify for 0% financing in Canada, you can still lock in a low interest rate by carefully comparing your options and getting prequalified with a variety of lenders.
Read our guide to the latest finance offers from car brands in Canada.
Fluctuating rates mean you’re taking a gamble on the market.
Know what your repayments will be for the duration of your loan term with a fixed rate car loan. With a secured loan you can find competitive rates and lock them in at the beginning, keeping them low while you make ongoing repayments.